25% Tax Free Option

Albert0500

MallyGirl said:

12.5 is not 25% of 62.5

No, but it is of 50k, take 50k then add the 25% tax free element = 62.5k unless I've completely lost the plot on this, which is possible 😂 

AlanP_2

You don't add the 25%, you take 25% of the total withdrawn.

You need to do the sum in reverse if that makes sense by adding 1/3rd to what you want as taxable income e.g. £48k taxable + £16k tax free = £64k withdrawal.

Albert0500

AlanP_2 said:

You don't add the 25%, you take 25% of the total withdrawn.

You need to do the sum in reverse if that makes sense by adding 1/3rd to what you want as taxable income e.g. £48k taxable + £16k tax free = £64k withdrawal.

Thank you, so its doable

Secret2ndAccount

If you take 64k, 16k will be tax free, and 48k taxable, so no 40% tax.
It's 16,757 and 50,271 if you want to take it to the limit and have no other earnings

Albert0500

Secret2ndAccount said:

If you take 64k, 16k will be tax free, and 48k taxable, so no 40% tax.
It's 16,757 and 50,271 if you want to take it to the limit and have no other earnings

Thank you!

Albert0500

Secret2ndAccount said:

If you take 64k, 16k will be tax free, and 48k taxable, so no 40% tax.
It's 16,757 and 50,271 if you want to take it to the limit and have no other earnings

Could I be really cheeky and ask you to do the math if i had 14.5k from other income?

Really appreciate your help, just don't want to get it wrong.

thank you very much.  

Secret2ndAccount

50271 is the limit. You have used 14500, so 35771 remains. The tax free amount is 1/3 of the taxable amount (25% of the total). So, 11923.67 tax free and 35771 taxable

Albert0500

Secret2ndAccount said:

50271 is the limit. You have used 14500, so 35771 remains. The tax free amount is 1/3 of the taxable amount (25% of the total). So, 11923.67 tax free and 35771 taxable

Thank you, appreciated!

Albermarle

Could be a good option to have a free chat with PensionWise.

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